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UK banks seek Mervyn's support

Updated on 20 March 2008

By Faisal Islam

Britain's biggest banks put pressure on the governor of the Bank of England to provide them with a wider range of support.

What happens when the cash that lubricates the banking system dries up?

The total outstanding value of mortgages in the UK is a little over one trillion pounds - that's £1,000bn.

Around three quarters of that total is financed by retail deposits - people put money into banks and building societies who loan it out again as mortgages.

But around £250bn now comes from the money markets - effectively money borrowed from other banks by selling them mortgage backed securities.

It's this funding stream that has effectively shut down since August of last year when the credit crunch hit.

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